Winney takes on GrainCorp with ABA acquisition

Australian grains veteran Alan Winney has fired a salvo at
GrainCorp
with his $120 million acquisition of Australian Bulk Alliance.

The purchase by the Emerald Group marks its entry into eastern Australia’s grains logistics industry, which is dominated by GrainCorp and, to a lesser extent, Cargill’s AWB.

The acquisition gives Emerald the Melbourne Port Terminal and 1.5 million tonnes of storage assets in the east.

Its decision to buy ABA from Sumitomo, which also owns 50 per cent of Emerald, came a week after GrainCorp detailed plans to develop a code of conduct with its grains exporter customers.

As a grains marketer, Emerald pays to use GrainCorp’s storage and port facilities alongside myriad exporters which have increased their presence in the Australian grains market since the dismantling of the single desk in 2008.

Mr Winney claims GrainCorp favours its grains marketing arm, which delivered a record profit in fiscal 2011, at the expense of other exporters.

“I think the logistics part of GrainCorp is subservient and supports their marketing group," Mr Winney said.

GrainCorp chief executive
Alison Watkins
said its proposed code of conduct, which it was developing with its customers, was aimed at ensuring its customers could expect a “very high level of service" from GrainCorp.

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“We want to provide other exporters with an excellent level of service for our ports and our country [storage] network," Ms Watkins said.“We don’t want to use all that capacity for ourselves and we never will," Ms Watkins said.

“We don’t want anyone to feel any reason to be needing to construct other supply chain assets."

The competition watchdog had recently renewed its port access undertakings with “little change", which showed its current operations were “working well", she added.

Mr Winney said Emerald would explore expanding its storage and logistics assets if it could not rely on companies “that want to favour their own marketing groups".